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Whiting Petroleum: Mini Protest In The Stock Market

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Whiting Petroleum
As of late, dozens of oil and gas related stocks had a mini rally in the stock market due to slight increase in the oil & gas prices and on the back of a better outlook for recovery which is discussed latter on in this article. However, couple of such stocks that gained significantly in the past one month are Pioneer Natural Resources (NYSE: PXD), Continental Resources (NYSE: CLR), Rice Energy Inc (NYSE:RICE) and EP Energy Corp (NYSE: EPE). Hence, Whiting Petroleum (NYSE: WLL) is no different, whose stock rose as much as 127% from its lowest point of $3.53 a share on February to the current level of $8.01 per share.
The important thing is that this rally in its share price performance was despite the fact that the company …show more content…

In fact, Whiting is spending approximately two-thirds of its capital budget on completions, without drilling any new well at this play. Whiting had completed 31 operating wells at this play that recorded 30-day rate of 1,339 BOE/d, which was 22% better than the third quarter wells. At present, the company is in the process of high-grading these wells, sorting through them, figuring out which ones are the very best that should deliver considerable costs savings in 2016.
Reduction in capital expenditure and sale of non-core assets to improve its liquidity
The relentless fall in oil and gas prices have enabled the financial institutions to lower the credit lines for many oil & gas companies of late. Whiting in anticipation to this, expects its credit line to be cut by more than $1.00 billion in the loan review scheduled for May. To overcome this problem, Whiting is taking other strategic measures such as reduction in capital expenditure and sales of non-core assets that should support its liquidity going forward.
For example, the company has reduced its capital expenditure by 80% to $500 million in 2016 as compared to 2015 levels. This means that the company realized a capital savings of $600 million, as its capital expenditure was $1.1 billion in

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